Jaitley confident economic impact of India-Pak tensions will be ‘marginal’

Finance minister Arun Jaitley is confident that any economic impact arising from recent tensions with Pakistan and incidents like the surgical strikes undertaken by Indian special forces will be “extremely marginal”.

Finance minister Arun Jaitley is confident that any economic impact arising from recent tensions with Pakistan and incidents like the surgical strikes undertaken by Indian special forces will be “extremely marginal”.

Jaitley was speaking on Sunday evening at an event organised by the University of Toronto’s India Innovation Institute in association with the Asia Pacific Foundation of Canada.

He said, “Let me set at rest any doubt on that score.” He attributed this to “a huge amount of resilience” in the Indian economy.

“Every time we faced a challenge in terms of any geopolitical event, the impact of it on our markets hasn’t been (felt) over a period of time,” he said when asked about the implication of recent events for India’s long-term growth story.

Jaitley told the gathering at the University of Toronto’s Rotman School of Management that any impact that had been felt on the markets and the rupee had been “temporary”, and that foreign direct investment into India “continues to increase”.

“Even recently, when the news came that India had made certain surgical strikes at the launchpads where the terrorists used to cross into Indian boundaries, there was obviously a certain amount of speculation as far as the markets were concerned. The impact was not what it would have been years ago,” he said, while answering a question from a moderator of the discussion on the theme “India’s Changing Policy Landscape: A Conversation with the Hon. Arun Jaitley, finance minister of India”.

Tensions between the neighbouring countries escalated after India said it had conducted surgical strikes against terror launch pads across the Line of Control (LoC) in Pakistan-occupied Kashmir. The strikes were carried out in the backdrop of a militant attack on an army base in Kashmir’s Uri, in which 19 soldiers were killed.